Government cracks down on local excess

CHINA: China's central government is reining in local government excesses blamed for swathes of wind turbines being left off the grid, lax inspection resulting in poor turbine quality and cozy relationships interfering with competition.

In an escalating battle of wills, the National Energy Bureau (NEB) has lambasted Jiuquan city, in north-west China's blustery Gansu province, accusing it of bungling the second-stage of the 10GW-level wind power project.

An NEB circular issued last month says the mismanagement included mandates to develop wind farms under stipulated quotas and to use local manufacturer turbines. The NEB says such directives overstep local authority. A similar NEB circular in late March was studiously ignored by the local authority.

But Zhou Dadi, deputy director of the National Energy Expert Consultative Committee, says two NEB circulars in just over a month demonstrate that China is serious about achieving more rational development of its wind sector during the upcoming five-year development period.

The Jiuquan project is the first of China's eight 10GW-level wind power projects. The Jiuquan government has made wind power a mainstay industry and sought to promote it by any means necessary.

The first-stage totalling 5.16GW, with just over 3,500 turbines, started construction in August 2009 and was completed in November 2010.

The second stage, 7.55GW, was announced by the local government to start last November and expected to complete in 2015. But progress is behind schedule, with loose ends remaining in construction planning.

Circular logic

On March 19, the Jiuquan municipal energy bureau issued a circular to local wind farm developers on the second-stage project, laying out construction quotas and rates of progress for 2011. It also established what types of wind turbines should be installed. It threatened to bar companies from developing wind farms under remaining quotas should 2011 targets be missed.

To the chagrin of many developers, the circular stipulated that Jiuquan's wind power equipment manufacturing park "is a national wind power equipment high-tech industrialised base, defined by the Ministry of Science and Technology ...

Accordingly, wind farm developers should in principle choose, through competition, to use the best wind turbines produced in this manufacturing park."

The manufacturing complex, officially unveiled in May last year, hosts more than 30 leading Chinese wind turbine, blade and other components makers, including Sinovel, Goldwind and Dongfang Electric.

"We've met this problem in various parts in the country," says Xie Changjun, general manager of Longyuan, China's largest wind farm operator. "Local governments tell me to use local wind turbines if I want to develop wind power in their domains. Some officials even wryly ask me to buy screws in their local markets. This goes against technological progress."

Xie says the frustration of coping with local politics has sometimes brought him to the verge of tears. Some provincial governments directly allocate wind sites to turbine makers that construct plants on their territory in exchange for the economic benefits they bring.

"We have to beg the wind turbine suppliers for the sites and buy their turbines," Xie says. "This is abnormal. I appeal to the government to distribute wind sites through public tender."

Crackdown

Under pressure to act, NEB cracked down. It determined that Jiuquan was acting beyond its mandate and on March 27 dispatched a circular demanding that it desist.

The NEB stated: "Local governments at all levels shall not take it upon themselves to determine the magnitude of wind power construction projects or extend development quotas to companies. They shall not force companies to complete construction tasks with administrative orders, ...

require companies to purchase locally made equipment or put forward locally protectionist conditions on turbines' place of origin."

Undeterred, the Jiuquan municipal energy bureau on April 27 issued its own circular demanding that preliminary work for the second stage project of the 10GW-level wind power project accelerate in 2011. It assigned a construction timetable to the 26 wind farm developers in the city. As for wind turbine tenders, it obliquely asked developers to buy local turbines to "support local economic construction in the mutual interest of local government and wind farm developers".

The NEB angrily reacted and issued its Circular Pertaining to Requirements on the Jiuquan Wind Power Base Construction on May 9, sternly reminding local officials that "the development programme and developer arrangement for Jiuquan's second-stage wind power project must be approved by the NEB .... Without NEB approval, no field construction is allowed."

The NEB further told Jiuquan that it would not be allowed to segment projects into lots smaller than 50MW. This was in response to the common practice in China of building wind projects under 50MW so that they may be approved by provincial governments rather than face stricter examination by the NEB. China has countless 49.5MW wind farms.

Consequences

To prove its warnings have teeth, the NEB declared: "For wind farms constructed ahead of schedule and without NEB approval, State Grid shall not arrange integration of the wind power to the grid. These wind farm developers shall not enjoy feed-in tariffs from National Renewable Energy Development Fund. The wind farm developers and unauthorised project-approving authorities shall face the consequences."

Zhou of the National Energy Expert Consultative Committee observes: "The problems with Jiuquan reflect general characteristics of China's fast-developing wind power sector." But he is hopeful that the NEB can gain traction. "NEB's two successive orders will not only correct deviations in Jiuquan, but also ensure healthy development of the entire Chinese wind power industry."

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